How FAFSA Works When You Have a Spouse

What to know about filing FAFSA when you have a significant other.

FAFSA, or the free application for student aid, is designed to help students with finances when they go on to achieve higher education. The financial aid office at your college/career school will decide how much financial aid you are eligible to receive. 

A couple different factors go into determining how much overall aid you may receive. These factors include:

  • The financial aid staff starts off by deciding upon your cost of attendance at the school you will be attending.
  • Next, they will consider your Expected Family Contribution (EFC).
  • Your EFC will be subtracted from your COA to determine the amount of your financial needs and how much need-based aid you might get.
  • To determine how much non-need-based aid you can get, the school subtracts any financial aid you may have already received from your overall cost of attendance.

What is the Expected Family Contribution (EFC)?

Couple with their arms around each other
Your parents may still have an impact on your financial aid even if you’re over the age of 24.

The EFC, or Expected Family Contribution, is a figure determined through your FAFSA financial aid application, CSS profile, or other financial aid applications, which colleges use to decide how much financial aid you may be eligible for. The EFC is the overall amount you’re expected to pay to cover your college costs. This includes fees like tuition, books, and accommodation. 

This figure represents a measurement of your family’s financial strength. Basically, your EFC is how much the federal government believes that your family is able to pay towards your college costs.

It’s important to remember that your EFC is not the exact amount that you’ll need to pay for college. It’s a base amount that can be used to work out many of your financial needs, but you might end up paying much more than this figure.

Keep in mind that certain assets are ignored by the EFC’s formula. these include:

  • Retirement savings. These savings include the 401(k) and 403(b) plans, IRAs and Roth IRAs, profit-sharing plans, and pensions.
  • Real estate equity in your primary residence.
  • Value of personal possessions such as vehicles and jewelry.
  • Value of the family business if it has fewer than 100 full-time employees.
  • Qualified withdrawals from the student’s own Coverdell ESA or 529 plan, or a plan owned by a dependent of the student’s parents.
  • Life insurance policies.
  • Any existing debt.

It’s important to note that the only way you will be considered for EFC is if you claim dependent status when filing the FAFSA. However, if you are married, you will automatically have independent status. Instead of your financial assessment being based on your own family’s status and earnings this time, the attention will be turned towards your own spouse’s financial status. 

Fortunately, marriage will usually have a positive impact on your financial aid eligibility if you are under the age of 24 and your spouse’s income isn’t very high. This is because you can claim yourself as independent status, and your parents' income will not be considered in calculations towards financial aid. However, your spouse’s income will still be considered.

When can marriage lessen the amount in financial aid eligibility? 

Marriage will usually have more of a negative impact on your financial aid reward if you are 24 or over and your spouse has a higher/steady income. Why does the age of 24 matter? Well, when you are 24 or over, you are considered to have complete independent status in regards to financial aid. This means that only your own income and assets are used to calculate your financial aid eligibility. 

However, if you are married, your spouse's income will be part of the calculations. If you are under 24 and from a family with a decent income, your spouse's income will decide whether or not marrying helps or hurts you. Overall, expect to earn less aid the higher your spouse’s income may be. If your parents don't have high income and they are supporting  other dependents, it is possible that your financial aid eligibility will actually go down when you get married. This is even more the case if you have brothers or sisters who are also in college. In these kinds of situations, your parents may qualify for significant financial aid, and that could actually become much lower if you have independent status. 

What “assets” may be considered when determining financial aid:

  • Taxable income, including not only salaries, but also interest, capital gains and dividends, from two years ago.
  • Benefits such as unemployment and social security.
  • Balances of bank accounts.
  • Balances of 529 plans and Coverdell Education Savings Accounts.
  • Non-retirement account value, including UTMA and UGMA accounts.
  • Tax allowances.
  • Contributions to retirement accounts.
  • Contributions to Flexible Spending Accounts and Health Savings Accounts.
  • Trust fund values.
  • Amount of equity in investment real estate and businesses.
  • Number of children in the family who will attend college in the upcoming school year.
Brief overview of the 529 savings plan. Image courtesy of T. Rowe Price.

Brief overview of the 529 savings plan. Image courtesy of T. Rowe Price.

It’s important to remember these important key points when going over FAFSA and marriage:

  • No matter how old you are when you’re married, you will be considered independent and your parents’ income will not likely be considered regarding financial aid calculations.
  • If your parents have more assets than your partner, marriage can increase your financial aid eligibility. 
  • If you are over the age of 24, expect to be considered independent no matter the marital status of your parents. 

Changes in Marital Status

If a student gets married after filing the FAFSA initially, the marital status on the FAFSA must be reported as single instead of married. It’s also important to remember not to anticipate a future change in the marital status. If you are engaged to be married, technically you are still not considered married. College financial aid administrators have permission to ask you for a copy of the marriage certificate to confirm the marriage.

The FAFSA cannot be updated to reflect any change throughout the year in a student’s marital status, except in circumstances that are quite rare. Federal regulations provide college financial aid administrators with the authority to update the FAFSA to reflect a change in a student’s marital status. This happens when they determine that it is necessary to address an inequity that could be a result of a poor financial situation.

Some colleges will allow changes in the student’s marital status due to a spouse dying, divorce, or any other kind of separation due to domestic violence. These changes are made on a case-by-case basis and of course subject to the discretion of a financial aid administrator.

If a dependent student’s custodial parent gets remarried after the student files the FAFSA originally and the FAFSA is then selected for verification, the size of the house and amount of college data elements must be updated to include a new stepparent. The college financial aid administrator will use best judgment to require the applicant to update the FAFSA that will include the new stepparent’s income. 

Other issues regarding changes in marital status:

  • If you submit your FAFSA when you are single but then get married, you can submit an update to the form so that your payment towards college is reflected by those government calculations. 
  • You can submit a change to your FAFSA in the event of you or your spouse losing income or have a reduction in income during the academic year.
  • You need to report your financial information and your spouse's information on the FAFSA even if taxes are filed separately. 
  • Keep in mind that you and your spouse's assets are used to calculate your aid eligibility. This means that even if you and your spouse have low income, you might find that your expected contribution is high if you or your spouse have significant savings.

Overall, it’s important to remember that marital status will typically not have too much of a negative effect on the amount of financial aid you receive. Even if the aid you received wasn’t enough, more often than not you will be eligible for family support!

Matt Lyons
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